The
U.S Department of Commerce today delivered to Congress a comprehensive
report on “The Competitiveness and Innovative Capacity of the United
States.” The report serves as a call to arms, highlighting bipartisan
priorities to sustain and promote American innovation and economic
competitiveness.

•In a constrained budgetary
environment, prioritizing support for these pillars is imperative for
America’s economic future and will provide a strong return on investment
for the U.S. taxpayer.

Speaking before an event at the Center for American Progress (CAP),
Commerce Secretary and former CEO John Bryson highlighted the importance
role innovation plays in the nation’s economy.

“This is a topic of pivotal importance,” Bryson said. “Our ability to
innovate as a nation will determine what kind of economy–what kind of
country–our children and grandchildren will inherit, and whether it’s a
country that holds the same promise for them as it did for our parents
and grandparents.”

The report was mandated as part of the America COMPETES Reauthorization
Act of 2010, which was signed into law by President Obama in January
last year. The report addresses a diverse range of topics and policy
options, including: tax policy; the general business climate in the
U.S.; barriers to setting up new firms; trade policy, including export
promotion; the effectiveness of federal research and development policy;
intellectual property regimes in the U.S. and abroad; the health of the
manufacturing sector; and science and technology education.

Some key findings of the report include:

Basic research. While private citizens and businesses are the top source
of new ideas, the government plays a key role in supporting and
developing their innovations. Examples of how this federal seed money
has helped change our world can be seen in the development of the
Internet, satellite communications and semiconductors, among other
job-creating advances. The report recommends federal funding be
increased for basic research – universities and research centers, for
instance. Consistent with the long-held view of President Obama, the
report also recommends a tax credit a tax credit be enhanced and
extended for private-sector R&D to give companies appropriate incentives
to innovate and improve the way basic research is transferred from the
lab into commercial products. The report recognizes that through efforts
like the Small Business Jobs Act, the i6 Green Challenge, and a number
of other initiatives, including increased funding, the Obama
Administration has shown a commitment to spurring innovation through
supporting research.

Education. The COMPETES report underscores the importance of education
in the science, technology, engineering and mathematics, or STEM,
fields. For instance, women with STEM jobs earned 33 percent more than
comparable women in non-STEM jobs. As a result, the gender wage gap is
smaller in STEM jobs than in non-STEM jobs. Ongoing and new
administration initiatives are addressing these challenges by making
college more affordable, spurring classroom innovation at all levels and
expanding the size and quality of STEM teacher ranks. To succeed in the
global economy, government must encourage students and workers to pursue
STEM education

Infrastructure. The report highlights the importance of federal
government investment in an expansive modern electrical grid that
provides robust broadband Internet access in both urban and rural
communities. Presently, 68 percent of American households have adopted
broadband, an almost eight-fold increase since 2001. Small and
medium-sized enterprises (SMEs) have benefitted hugely from the Internet
and created more than twice the number of jobs as firms not on the Web,
creating 2.6 jobs for each one eliminated. The report also highlights
Obama Administration efforts to build a 21st century infrastructure,
including the NextGen Air Traffic Control System, opening spectrum for
wireless communication, creating smart grid standards and providing
unprecedented funding for road, rail and bridge projects across the
country.

Supporting
Manufacturing. The report also examines manufacturing, recognizing that
a flourishing U.S. manufacturing sector is crucial to competitive
strength, economic growth and job creation, as well as to sustaining a
strong middle class. In 2009, manufacturing comprised 11.2 percent of
GDP and 9.1 percent of total U.S. employment, directly employing over 11
million workers. Manufacturing is also the biggest source of innovation
in our economy. Sixty-seven percent of all the business R&D in America
is done by manufacturing companies. The report outlines a series of
steps the Obama administration has taken to support American
manufacturing, including rescuing the U.S. auto industry, creating the
White House Office of Manufacturing Policy and forming the Advanced
Manufacturing Partnership (AMP), as well as initiatives such as the
Materials Genome Initiative and the National Digital Engineering and
Manufacturing Consortium.

The report also touches on a number of other areas, including the
benefits of regional clusters, the Administration’s Startup America
Initiative, the National Export Initiative, corporate tax reform, as
well as the importance of intellectual property protection.